Toll Road Officials Angry Over Audit

ByTRACY WOOD and NORBERTO SANTANA JR. |December 13, 2012

Orange County toll road supporters lashed out at environmentalists Wednesday, accusing them of trying to block expansion of Orange County toll roads by persuading state officials to review the health of the projects’ bonds.

“This is one more desperate act by them [environmentalists] to find some other way to block the extension,” said outgoing county Supervisor Bill Campbell.

Campbell, who serves on the boards of both the Route 241 Foothill-Eastern and the Route 73 San Joaquin Hills toll roads, said he’s confident a state assessment will determine there is nothing wrong with the way bonds are being handled for both toll roads.

Toll road supporters and environmentalists have been at odds for years over whether to extend the Foothill-Eastern corridor through San Onofre State Park.

The Los Angeles Times reported Wednesday that the California Debt and Investment Advisory Commission, under the direction of state Treasurer Bill Lockyer, was trying to determine whether the toll roads can pay off $10.5 billion in debt payments by the time bonds held by private investors mature.

Ridership and revenue from the two toll roads have never lived up to expectations. The Times reported that rating agencies on Wall Street have given the San Joaquin toll road junk bond status and the Foothill-Eastern toll road is at the lowest grade for investments.

The state inquiry was initiated by former GOP Assemblywoman Marilyn Brewer of Newport Beach, who asked Lockyer to check the health of the bonds.

Campbell said Brewer’s participation and concerns were a surprise to him.

Neither Brewer nor a representative of the Los Angeles office of the law firm SNR Denton, which was cited by the Times as questioning the viability of the bonds, returned phone calls seeking comment.

“My guess is this is just a political ploy to try to discredit us as we try to move forward,” said Lisa Telles, acting chief executive officer for the toll roads. “Our finances are open, and we’re willing to talk” to state officials, Telles said.

But Tom Dressler, spokesman for the treasurer’s office, said the review “is not an effort to thwart the toll agencies from doing anything. It’s an effort by a responsible state agency to assess their financial position specifically as it relates to bonds for financing.”

Dressler said a report would be issued sometime after Jan. 1.

The fact that the toll roads have had trouble generating the money needed to pay off bonds “is definitely not a new issue,” Telles said. “We’ve already created the fix. We’ve made every single debt payment.”

In 2011, $2.1 billion in debt for the San Joaquin Hills toll road were restructured, adding six years to the time they will be paid off and the route becomes a state-owned freeway. Now they will be paid off in 2042, nine years later than their original deadline.

Telles said the move makes it possible to pay off the bonds despite having lower toll revenue than what was originally estimated.

Bonds for the Foothill toll road will be redone next year.

Campbell said the restructuring was a critical policy move taken by the toll road agency that ensures its long-term viability.

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